Understanding Creating Government Contracts
Typically, government contracts are long-term agreements awarded for a specific amount or for defined estimated amounts and then managed to that amount. Contractors must meet specific government requirements to be awarded the contract, and they must manage the contract according to government rules and regulations. Ultimately, these requirements are centered on cost control, billing, and cash settlement. The PeopleSoft Contracts application enables you to comply with government regulations, run required reports, and perform required analysis using data captured in the Contract Entry component (CA_HDR_PNG).
The features and functions of the PeopleSoft Contracts application are the foundation for government contracts; once a contract is created and assigned the Government contract classification, the contract can be built according to the specific requirements of the government contract.
The contact itself is divided into two main parts: the contact header and the contract lines. You use the header level contract pages to capture the overall customer data, as well as the overall contract terms and conditions. The line level data consists of the products and services that make up the contract. This data can be any combination of amount-based products, rate-based products, or rate-based products associated with fee types (cost-plus). At the line level, you can enter specific awarded amounts; set up limits for costs, fees, and revenue (optional); define withholding criteria to control how much of your costs and fees are billed and when; define and manage progress payments; and associate fee types with contract lines to set up and manage cost-plus contract line scenarios. After the contract is defined and contract lines are added to the contract, you can set up and manage billing and revenue at the contact line level according to the needs of each individual line.
Setting up a government contract so that it is available for billing and revenue recognition processing consists of these tasks:
Define the contract header data.
Enter the overall customer data, terms and conditions of the contract, legal entity, signed date, and so on.
Add products to the contract and enter contract line details.
Associate projects and activities to rate-based contract lines, set up progress payment details for contract lines associated with progress payment amounts, set up withholding and limit amounts where applicable, define fee details, and so on.
Price contract lines.
Set up and assign rates to rate-based contract lines and allocating contract line amounts across all amount-based contract lines.
Review and update account distribution data for the contract lines.
Set up accounting rules for rate-based contract lines, and set up and assign account distributions and contract liability options to amount-based contract lines.
See Understanding PeopleSoft Contracts Structure for Government Contracting.
Create and assign billing plans to contract lines and any progress payments worksheet.
Use templates to automatically create and assign billing plans to contract lines, or manually define billing plans. Billing plans are required; they are the means by which billable contract line transaction data is passed to the PeopleSoft Billing application. If progress payments are assigned to any amount-based contract lines, then a billing plan must be defined and assigned to the progress payment worksheet to process the progress payment requests.
Create and assign revenue plans to contract lines.
Use templates to automatically create and assign revenue plans to contract lines, or manually define revenue plans. Revenue plans are required; they are the means by which accounting data for contract line transactions is passed to the PeopleSoft General Ledger.
Set the contract processing status to Active.
Only contracts with a processing status of Active are available for processing.